Burke tried to cut Rezko’s taxes; voted on deal involving client

Ald. Ed Burke listens to tributes from his colleagues at City Hall, as he is recognized for 40 years of service as a Chicago alderman on March 18, 2009. | Sun-Times files

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By Tim Novak, Andrew Herrmann and Steve Patterson | For the Sun-Times

Why did Ald. Edward M. Burke vote to approve Tony Rezko’s plans to develop the South Loop’s biggest piece of vacant land even as he was working for Rezko on that same deal?

Burke says: I forgot to abstain.

The much-conflicted alderman says he meant to sit out the vote. He’d even sent a letter to the Chicago Board of Ethics in August 2003 saying he would abstain from any Council votes on Rezko’s plan to put as many as 5,000 homes and stores on a 62-acre site along the Chicago River at Roosevelt Road.

But then Rezko’s project came before the City Council on March 31, 2004, and Burke cast his vote — in favor.

“An error occurred,” the alderman said in a written response to questions, “and Rule 14 was not invoked.”

That would be the Council rule under which aldermen are supposed to abstain from a vote when they have a conflict of interest.

Of course, it’s up to the alderman who has a conflict to invoke the rule.

Burke’s legal work for Rezko’s Rezmar Corp. is referenced in records on the 62-acre site Rezko wanted to develop with $140 million in city subsidies. The project fizzled, and Rezmar sold the land.

Rezko has since been indicted on federal corruption charges that accuse him of demanding kickbacks from companies seeking state contracts under Gov. Blagojevich.

When Burke voted for Rezko’s project, the alderman’s law firm was trying to get a 77 percent cut in the site’s real estate taxes, arguing that Cook County Assessor James Houlihan was wrong to have used the sale price to determine the property’s value.

If it had succeeded, the appeal would have saved Rezmar more than $390,000 in real estate taxes. And Burke would have gotten 20 percent of that savings, according to Daniel Mahru, Rezko’s former partner.

But Burke lost and got nothing. Because he didn’t get paid, he never had to publicly disclose his legal work for Rezmar.

“The ordinance did not require me to disclose that my law firm represented this company,” Burke said in his statement to the Sun-Times. “The rule is very simple: You must receive ‘compensation in excess of $5,000,’ as outlined in the city’s own disclosure form. In fact, my law firm received no compensation at all.”

Burke spent at least six months trying to win the tax cut for Rezko:

• On Nov. 24, 2003, Burke asked Houlihan to lower the assessed value. He didn’t get what he wanted.

• On Dec. 16, 2003, Rezmar hired Burke to appeal to the Cook County Board of Review.

• On March 31, 2004, Burke joined fellow aldermen to approve Rezko’s development plans for the 62-acre site.

• On May 25, 2004, Burke appealed to the Board of Review, which refused to give Rezmar a tax break.

Burke has a history of voting on legislation involving his legal clients. Ten years ago, the Sun-Times found Burke voted to approve city leases for two airlines represented by his law firm. Burke then used a rare parliamentary move to change four “yes” votes to abstentions. Burke blamed those “yes” votes on the late Ald. Thomas Cullerton, claiming he told Cullerton that he planned to abstain from voting on the airline leases.

THE LIST

Ald. Edward M. Burke is chairman of the Chicago City Council’s powerful Finance Committee. He also runs a small law firm, Klafter & Burke, that specializes in appeals of property assessments. Burke gets a cut of what clients save in lowered property taxes. Burke reported having 37 law clients that did business with the city last year. Each paid him at least $5,000.

1. ABN Services Co./LaSalle Bank

2. Admiral Heating & Ventilating

3. American Airlines

4. American Trans Air Inc.

5. Ameritech

6. AT&T Communications

7. Blue Cross Blue Shield

8. CenterPoint Properties

9. Centrum Properties

10. Chicago Community Development

11. Cole Taylor Bank

12. Commonwealth Edison

13. Davis Group, LLC

14. Dominick’s

15. Fifth Third Bank

16. Fitzsimmons Surgical

17. Friedman Properties Ltd.

18. Greater Southwest Development Corp.

19. The Habitat Company

20. Harris Bank

21. Holsten Development

22. K-Five Construction Corp.

23. MB Real Estate

24. Northern Trust Company

25. Northwestern Memorial Hospital

26. Palumbo Bros. Inc.

27. Pittsfield Building

28. Prairie Material Sales

29. Senior Lifestyle Corp.

30. Southwest Airlines

31. Teng & Associates Inc.

32. The Standard Companies

33. TMobile

34. U.S. Equities Realty Inc.

35. Union League Club of Chicago

36. WBEZ Alliance

37. Wicklander Printing Corp.

Source: Burke’s “statement of financial interests,” filed with the city clerk